Asia markets close mostly lower as U.S. jobs report show room for more hikes; Adani saga continues

Bank of Japan has approached its deputy governor Masayoshi Amamiya to potentially succeed Haruhiko Kuroda in leading the central bank, Nikkei reported, citing people familiar.

Nikkei reported that the Japanese government and ruling party officials have discussed the matter with the current deputy governor.

Japan’s government will present to the parliament its central bank nominees to take the leadership role as Kuroda’s term ends on April 8, the report added.

— Jihye Lee

Australia’s retail trade volume fell by 0.2% in the final quarter of 2022 compared to the previous quarter, according to seasonally adjusted data from the Australian Bureau of Statistics.

The decline is less than the 0.6% drop expected by economists in a Reuters poll.

Retail trade volumes fell by 3.9% on a monthly basis, and rose 7.5% compared to the same period a year ago.

— Jihye Lee

Here are some major economic data investors will be watching out of the Asia-Pacific this week.

Australia’s retail trade readings for the final quarter of 2022 will be released later today. Thailand’s inflation data and Indonesia’s gross domestic product will also be published.

On Tuesday, the Reserve Bank of Australia announces its benchmark cash rate decision. Economists polled by Reuters are expecting the central bank to hike by 25 basis points in February.

Japan’s current account balance for December will be released on Wednesday.

On Thursday, Taiwan will release its inflation print for January.

China’s consumer price index and producer price index for January will be published on Friday.

— Jihye Lee

Investors look increasingly bullish on tech and are flocking back to the sector in droves.

But is the worst of the tech slump over? Market pros weigh in and reveal their top picks to play the sector.

Pro subscribers can read more here.

— Zavier Ong

Stocks closed lower Friday, but ended a winning week.

The S&P 500 declined 1.04% to 4,136.48. The Nasdaq Composite shed roughly 1.59% to 12,006.95. Meanwhile, the Dow Jones Industrial Average slipped 127.93 points, or 0.38%, to 33,926.01.

— Sarah Min

The Federal Reserve is even more likely to raise interest rates to its forecast 5.25% for the top end of its fed funds target rate range, after January’s employment report showed a boom in new jobs.

There were 517,000 jobs added in January, well above the Dow Jones consensus of 187,000.

“For the Fed, it means they’ve got to be worried about a reacceleration in inflation. Even though wages are decelerating in this measure, aggregate demand is too strong. These are paychecks. Some of them multiple,” said Diane Swonk, KPMG chief economist. “We still have a lot more data before we get to March. For now, it’s a quarter point [hike]. They are not going to move off 5.25%. I can tell you that right now.”

In the futures market, traders were betting on an end rate, or terminal rate near 5%. According to rate strategist Ben Jeffery at BMO, the fed funds futures showed a high 4.97% by June, up from 4.89% Thursday.

The market is pricing in a 25 basis point hike for March. A basis point equals 0.01 of a percentage point.

But Jeffery said the futures market is now pricing in more of a chance for a quarter point hike in May as well. “There was always a solid probability for 25 basis points in May to be the last hike, and this has increased the probability of that,” he said.

— Patti Domm